What is Fedwire service

Fedwire is an abbreviation for the funds transfer system which operates in the United States of America. The Fedwire system is also known as the Federal Reserve Wire Network which essentially facilitates electronic funds transfer between participating financial institutions.

Federal Reserve Wire Network explained

The Federal Reserve System is the central banking institution in the United States. Established in 1913, this banking body follows the Federal Reserve Act and is responsible for monitoring the US monetary policy as well as supervising and regulating all banks and financial institutions.

One of the main services offered by the Federal Reserve Bank is the Fedwire services. Fedwire offers banks and other financial institutions a secure and enhanced payment service in order to conduct their electronic funds transfers. This service works in conjunction with CHIPS (clearing house interbank payments system) in order to provide participants the network to conduct their high-value funds transfers.

The main goal of the Fedwire agency is to offer a service which is efficient and accessible to conduct US whole sale payments which are often critical on time frames. This system ultimately enables large-value money transfers thus promoting domestic financial stability and aiding economic growth within the United States.

The Fedwire funds service is a real-time gross settlement, therefore it allows banks and other financial institutions to send and receive real- time and time-critical payments in the most secure and efficient method possible. The Fedwire funds service and the Fedwire securities service are the two main services that the Federal Reserve Bank offers in terms of whole sale money transferring.